A Senior Official at Microsoft has admitted that the introduction of its XP operating system has failed to push sales of the PC in Europe.

Neil Holloway, CEO of Microsoft UK, said as much in an interview with the Grauniad yesterday, and also warned that sales of PCs in the UK are down year on year by about eight per cent.

That news will discourage manufacturers who had hoped for better things in the first half of 2002, but indications from Asia over the last four weeks show that impetus for the PC market is slowing.

Because firms like Dataquest use figures of installed Microsoft operating systems to produce their reports of PC shipments, this also indicates that its next set of reports for Europe are likely to be negative.

Holloway told the broadsheet newspaper that the proportion of PCs shipped with XP "is significantly higher" than expected, but he is pinning his hopes on so called Tablet PCs later on this year.

Intel also hopes sales of these will further PC CPU shipments, but many in the industry see this as wishful thinking.

He told the Grauniad that within five years tablet PCs will be the most popular type of PC sold in America, which underlines uncertainty within the industry of just how successful the new form factor will be.

Holloway said that globalisation "will happen" and that most people who did business with Microsoft "think we are great guys to do business with".